Ubisoft Entertainment: Shares Plunge 34% Following Major Earnings Warning
Ubisoft Entertainment's stock plummeted by 34% to 4.35 euros on Thursday, January 22, following the announcement of a drastic revision of its 2025-2026 forecasts, with net bookings expected at 1.5 billion euros and a non-IFRS EBIT of around -1 billion euros. This historic drop follows a press release issued on Wednesday evening revealing a major restructuring around five Creative Houses, the cancellation of six games, and the closure of several studios.
Dramatic Opening and Historic Low
UBISOFT ENTERTAIN stock opened this Thursday, January 22, at 5.26 euros, immediately falling more than 20% from the previous day's close of 6.63 euros. The title collapsed by 34% during the session to 4.35 euros, its lowest quotation in over ten years. The group's valuation thus dropped to 606 million euros, down from more than 1.5 billion a year earlier. The share of capital traded reached 4.57%, reflecting the scale of the liquidation movements. Oddo BHF referred to it as a 'mega profit warning' in a note. This tumble occurred after the release of a press statement on Wednesday evening announcing a major organizational overhaul and a drastic revision of financial targets for the 2025-2026 fiscal year.
Major Restructuring and Financial Revisions
The French publisher is undergoing a reorganization into five creative divisions, announces the cancellation of six games (including a remake of Prince of Persia), and the delay of seven projects. For 2025-26, the group now targets a net bookings of approximately 1.5 billion euros, implying a decrease of about 330 million euros in gross margin, and an EBIT loss of 1 billion euros. Furthermore, the group announced the closure of its Halifax and Stockholm studios, a reshuffle in its branches in Abu Dhabi, Finland (Redlynx), and Malmö in Sweden (Massive), aiming for a fixed cost reduction target of at least 200 million euros over 2 years. Analyst revisions also took place this Thursday: Kepler Cheuvreux lowered its price target from 7 to 5 euros with a 'reduce' recommendation, while BMO Capital Markets brought it down from 14 to 10 euros with an 'outperform' advice. Technically, the stock is now trading well below its 50-day moving average of 6.36 euros and its 200-day moving average of 8.59 euros, confirming a structurally bearish dynamic. The RSI reached 100, reflecting extreme selling pressure during the session, while the Bollinger Bands tightened around 6.12 euros, a level now far removed from the current price. The support threshold of 6.09 euros was significantly breached.
